Correlation Between Fair Oaks and Alior Bank
Can any of the company-specific risk be diversified away by investing in both Fair Oaks and Alior Bank at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Fair Oaks and Alior Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fair Oaks Income and Alior Bank SA, you can compare the effects of market volatilities on Fair Oaks and Alior Bank and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Fair Oaks with a short position of Alior Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fair Oaks and Alior Bank.
Diversification Opportunities for Fair Oaks and Alior Bank
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fair and Alior is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Fair Oaks Income and Alior Bank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alior Bank SA and Fair Oaks is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Fair Oaks Income are associated (or correlated) with Alior Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alior Bank SA has no effect on the direction of Fair Oaks i.e., Fair Oaks and Alior Bank go up and down completely randomly.
Pair Corralation between Fair Oaks and Alior Bank
Assuming the 90 days trading horizon Fair Oaks Income is expected to generate 0.43 times more return on investment than Alior Bank. However, Fair Oaks Income is 2.34 times less risky than Alior Bank. It trades about 0.11 of its potential returns per unit of risk. Alior Bank SA is currently generating about 0.01 per unit of risk. If you would invest 45.00 in Fair Oaks Income on September 12, 2024 and sell it today you would earn a total of 12.00 from holding Fair Oaks Income or generate 26.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 99.72% |
Values | Daily Returns |
Fair Oaks Income vs. Alior Bank SA
Performance |
Timeline |
Fair Oaks Income |
Alior Bank SA |
Fair Oaks and Alior Bank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fair Oaks and Alior Bank
The main advantage of trading using opposite Fair Oaks and Alior Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fair Oaks position performs unexpectedly, Alior Bank can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Alior Bank will offset losses from the drop in Alior Bank's long position.Fair Oaks vs. Toyota Motor Corp | Fair Oaks vs. SoftBank Group Corp | Fair Oaks vs. OTP Bank Nyrt | Fair Oaks vs. Hershey Co |
Alior Bank vs. Toyota Motor Corp | Alior Bank vs. SoftBank Group Corp | Alior Bank vs. OTP Bank Nyrt | Alior Bank vs. Hershey Co |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
Transaction History View history of all your transactions and understand their impact on performance | |
Money Managers Screen money managers from public funds and ETFs managed around the world |